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Benefits of undertaking social return on investment analysis
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Summary
Every one pound invested in Link's award-winning Older Persons' Advice Project achieves a social return of £27.53. Link's Community Regeneration Officer explains more.
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Transcript
Jane Smernicki:
[0:01] This is a podcast from Link Group. To hear more Link podcasts, visit www.linkhousing.org.uk.
[0:10] Every one pound invested in Link's award-winning Older Persons' Advice Project achieves a social return of £27.53. That's the finding of a social return on investment study that was carried out by Link's Community Regeneration Officer, Sheila Maxwell. Sheila is here to tell us more about the study and about the benefits of undertaking social return on investment analysis. Sheila, can you explain why you undertook the study?
Sheila Maxwell:
[0:36] We decided to choose a social return on investment process, because it's a way of looking at how we impact on various stakeholders. But also as a way to find out how to turn that into financial terms that can be understood when commissioning projects, investing in projects. And can be understood by various stakeholders in terms of what difference does this project make to us as well as the older people that we help.
[1:01] The social return on investment process can be used as an evaluation tool that helps us to decide what was good about the project, what was bad about the project, but also as a way of managing the project in the future. It's also a way of demonstrating the social and business case to other stakeholders and to potential funders and investors.
Jane:
[1:19] And how did you actually carry out the analysis?
Sheila:
[1:22] The social return on investment process concentrates on stakeholders and the difference that the project makes to those stakeholders. So the first part of the process is to identify the scope. What question am I trying to answer? What period are we looking at? What resources do we have available?
[1:40] For the Older Persons' Advice Project, we identified key stakeholders as being older people themselves, our partner Registered Social Landlords, Falkirk Council, who invested in the project, the Scottish Government, and the NHS. There were many other stakeholders we could have involved, but, as discussed in the full report, you have to decide which ones are what's called "material." And we felt the stakeholders we had identified were the most important.
[2:06] After identifying your stakeholders, you then have to do out and talk to them, because they're the ones that know the most about how the project's affected them. We supported 351 older person households during the period that we were evaluating. So we took a 10% sample and we went back and visited those older people again. So it was everything from improving quality of life, obviously increasing household income, reducing fuel poverty, increasing the amount of time that older people can stay in their own homes, safely and securely.
[2:33] And also looking at how one single outcome can have a multiple impact on various stakeholders. For example, putting in adaptations into an older person's house has a benefit to the Registered Social Landlord and to the local authority who would otherwise have to re-house them, in sheltered or very sheltered, housing, or a care home. So you can see how you're developing a much broader picture of the impact of your project.
[2:57] After you've done that, you then have to go out and develop indicators, to see how you'll measure that difference. And that's one of the key differences in social evaluation with SROI, is that you're putting financial proxies onto those differences that you've made.
Jane:
[3:11] So the key finding is that for every one pound invested, a social return of £27.53 is achieved. Sounds impressive. Can you tell us more?
Sheila:
[3:20] Well, there's a social return ratio, which looks at the amount invested in the project, over the period you're looking at, but also a value of the total impact. So you would go through all your outcomes that you've identified, using your impact map. Identify your indicators, look at your financial proxies, see how many people that applies to.
[3:39] There's a lot of this ROI process is justifying the decisions you make, both in terms of quantity, proxies chosen, and also what's called dead weight. So, for example, with benefit uptake we couldn't claim that the full 404,000 by OPAP and additional benefits was only going to be as a result of OPAP. If we looked back over the same period, we would have to say that a certain proportion of these older people we helped would have approached other advice services during that period.
[4:10] So, what I did, to look at, to subtract that off the value of the impact that we had, was to look at the Department of Work and Pensions uptake rates, of which there's quite a considerable amount of research. That's part of the financial proxy process is that you look at the total amount, minus dead weight, and there's also attribution that you must consider and drop off.
[4:33] Some impacts will continue into the future and other will have a decrease in return. It's really important that you consider the story as well as the ratio itself, because the two must be looked at hand in hand.
Jane:
[4:44] But your study also made some other important findings about the impact of the project, didn't it?
Sheila:
[4:49] Well, really it helped to give us excellent information, in terms of case studies, but also to make the case to our partner housing associations, to the Scottish Government, about the value of the project. And how we could demonstrate that value in concrete terms. There is a such a thing as what's called the multiplier effect. Because benefit uptake, is from the perspective of the Scottish government, is a positive thing in terms of increasing total income to the Scottish economy.
[5:17] Because benefits are sourced in the UK Treasury. And while there will be an amount ring-fenced for supporting benefits, if that money's not taken up in Scotland, it goes back into the UK Treasury, and it may never come to the Scottish economy. So what we can do is look at the additional income to Scotland and the multiplier effect of older people spending that money within Scottish communities.
Jane:
[5:40] And now, Sheila, you're one of Scotland's few fully-accredited social return on investment practitioners. How do you plan to use these skills beyond the Older Persons' Advice Project study?
Sheila:
Well, first of all, for Link Group, we want to identify which other parts of our activities would benefit from a social return on investment analysis. The next stage would be to identify which projects, which staff would be carrying out the social return on investment analysis and then arrange training, through myself, to ensure that they have the appropriate support to deliver the social return on investment analysis. Also, we would then continue to look at mentoring and perhaps share advice between each other to give that mutual support throughout the process. Because it is a new and emerging method which, it always helps to have mutual support.
Jane:
[6:32] Sheila, thank you very much. And a copy of the social return on investment study is available on our website at www.linkhousing.org.
